Tech Fix: Is your brand funding these fraud schemes?

Tech Fix: Is your brand funding these fraud schemes?

Welcome to The Tech Fix, a weekly newsletter where we break down the latest technology news and trends from the advertising and marketing industry, curated by technology editor Jessica Heygate.

Hot topic

TikTok is facing government pressure once again, but it appears as though the Biden administration will not demand it to divest its U.S. assets as the president’s predecessor unsuccessfully tried to do.

A draft agreement between TikTok and the U.S. government is under review, stipulating that TikTok store its U.S. data solely on U.S. servers (operated by Oracle), allow its algorithm to be monitored (also by Oracle) and have its operations overseen by a board of security experts that report to the government.

The government’s priority is obtaining oversight into TikTok’s operations, allowing it to address both security concerns and the potential that the Chinese government is using TikTok to spread propaganda and interfere in elections. These are pressing concerns within the ad industry, too — in the wake of Cambridge Analytica brands are terrified of supporting election manipulation.

Some observers argue oversight doesn’t go far enough. But the government could face retaliation that could damage U.S. businesses if it takes too strict of an approach, says Gary Kibel, a partner at Davis+Gilbert LLP.

“There’s always a concern that the harsher the U.S. government is on a Chinese company, will that in turn result in China being harsher on U.S. companies?” says Kibel.

Under the hood

Two fraud developments you should be aware of.

An app fraud scheme discovered by cybersecurity firm Human in 2019 is active again, and has doubled in size. The operation originally consisted of 40 fraudulent Android apps purporting to offer selfie editing and beauty filters. Once downloaded the fake apps would call up hidden ads to siphon away spend, evading fraud filters by making the apps appear legitimate in their code. In its third wave, the operation controlled more than 75 Android and 10 iOS apps — mostly copycat versions of mobile games — which accumulated 13 million downloads. The apps have been removed from Apple and Google’s app stores, but the fraudsters remain active. 

It is common for fraud operations to resurface after being discovered, with more advanced tactics to evade detection and a broader scope of their operations. Human cofounder and CEO Tamer Hassan said the “only way” to stop cybercriminals is to “work together across the industry on disruptions.” Some simple ways to address fraud include setting up an app-ads.txt file to show authorized sellers, and only working with SSPs whose SDKs follow the OMID protocol for identifying ad-serving apps.

While the above fraud operation is money motivated, two other operations recently uncovered by Meta were designed to sway public opinion and influence political votes. One operation that originated in Russia used 60 fake news sites to target Europeans with content critical of the war in Ukraine. A smaller network controlled in China targeted U.S. voters ahead of the 2022 midterms and spread anti-government content in the Czech Republic. Meta has shut down both, but expect plenty more activity in the run up to the midterms.

Fresh tech

At its Dreamforce conference last week, Salesforce unveiled a customer data platform, Genie, that unifies customer data across its products to provide a real-time, comprehensive snapshot of each customer’s behavior. It’s Salesforce’s “biggest innovation” in the last two decades, it said, and will allow businesses to take a more personalized approach to customer outreach and experience. But it’s also quite frightening seeing all the information Salesforce collects on individuals come together in one profile. Here’s a screenshot demo’ing the product:

Stagwell has hired a CTO for its Marketing Cloud division, responsible for the technology roadmap, data strategy and cloud portfolio integration across its tech products. Mansoor Basha joins from the Applied Intelligence Practice at Accenture and brings more than 20 years of experience across product development, management and marketing, engineering and new business development. He also serves as an investment advisor to 11.2 Ventures and Purple Arch Ventures and teaches digital marketing at New York University.

Spotify has ventured into audiobooks. A new section of the Spotify app offers subscribers the option to purchase a catalog of more than 300,000 titles. It forms part of Spotify’s strategy to become the leading platform for audio, and follows previous bets on podcasts and comedy streaming. Audiobooks are currently only available to users in the US. 

Ethereum has completed its “merge,” drastically shrinking its carbon footprint. The decentralized, open-source blockchain reduced its carbon emissions by more than 99.9% earlier this month after abandoning a mechanic called “proof of work.” The move presents a new opportunity for carbon-conscious brands to engage in blockchain projects. Learn more in Brandon Doerrer’s piece below.

A trio of senior executives from The New York Times’ experiential agency Fake Love have joined rival creative technology agency Deeplocal, including CEO Josh Horowitz, who has become CCO of Deeplocal, as well as former chief creative technologist Blair Neal and former VP of client partnerships Miranda Martell. The Times acquired Fake Love in 2016.

Trends

The World Federation of Advertisers (WFA) recently asked CMOs for their thoughts on data ethics. Of those that responded, the vast majority expressed concerns about being associated with unethical uses of data via their partners and data suppliers, and only a third said they believe their marketers are consciously avoiding using data in an exploitative way. But even more concerning is the lack of engagement in the topic. Only 12 CMOs participated in the survey. For context, the WFA says on its website there are more than 130 people in its CMO Forum. 

This paints a picture in and of itself: data ethics is either misunderstood or has been sidelined while marketers face up to pressing economic challenges. Indeed, CMOs who participated in the survey named cost and lack of understanding as the biggest barriers to addressing data ethics concerns. Regulators including the FTC have made it clear that unethical data practices are now a “top priority” — so it’s probably worth learning what this means before a nasty fine comes your way.

Buddy up

  • TripleLift has partnered with video API and infrastructure platform Zype to dynamically insert ads into linear TV programs on connected TVs. 

Dollars and deals

  • Infillion acquired Analytiks.ai, a Montreal-based technology company that generates in-store traffic metrics for venue owners. The location technology allows brands to understand digital and physical customer behavior.

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